Menu

Daily Archives: 22nd December

The Gini coefficient (named after its inventor, statistician and sociologist Corrado Gini) measures the income distribution of a country’s population. It is often used as an analogue for measuring inequality within a population in general.

A Gini coefficient of zero represents perfect income equality (everybody ears exactly the same amount) and a Gini coefficient of one represents perfect inequality (one person in the population earns all the money). Denmark has the lowest Gini coefficient (0.24) and the Seychelles the highest (0.66); the UK has a Gini coefficient of 0.34 and the US 0.45.

Consider three hypothetical ten-person countries:

Country

Randomland

Inequaliteria

Equalistan

Citizen #1

49755

500000

50000

Citizen #2

61429

10

50000

Citizen #3

80411

10

50000

Citizen #4

45021

10

50000

Citizen #5

68466

10

50000

Citizen #6

96746

10

50000

Citizen #7

18788

10

50000

Citizen #8

71039

10

50000

Citizen #9

79777

10

50000

Citizen #10

10258

10

50000

Gini Coefficient

0.250

0.900

0.00

Another way of measuring income inequality is the Robin Hood index, which indicates the portion of a country’s total income that would need to be taken from the richest half of the population and given to the poorest half of the population in order to achieve income equality. For Randomland the Robin Hood index is 18.71%, for Inequaliteria it is 90% and for Equalistan it is 0%.